Essay
a. What is the equilibrium interest rate that clears this market? What is the equilibrium Q of loans provided by the loanable funds market? b. If the government places a cap on the nominal interest rates in this market at 3 percent below the current equilibrium rate. What is the dollar amount of the excess demand for loans in this market? What is the actual amount of investment that would take place in this market after the interest rate ceiling has been set?
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